-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N24yytBftcItkrDSFVF7WduFctMALPFVlAWf2KKjoPlPJfxRC9WVE6PUnxSiVTvb zvbROfy9RXN1NbCj60D3WA== 0001019687-06-000175.txt : 20060127 0001019687-06-000175.hdr.sgml : 20060127 20060127153308 ACCESSION NUMBER: 0001019687-06-000175 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20041130 FILED AS OF DATE: 20060127 DATE AS OF CHANGE: 20060127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Ingen Technologies, Inc. CENTRAL INDEX KEY: 0000861058 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 880429044 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-28704 FILM NUMBER: 06557575 BUSINESS ADDRESS: STREET 1: 35193 AVENUE A, SUITE C CITY: YUCAIPA STATE: CA ZIP: 92399 BUSINESS PHONE: 800-259-9622 MAIL ADDRESS: STREET 1: 35193 AVENUE A, SUITE C CITY: YUCAIPA STATE: CA ZIP: 92399 FORMER COMPANY: FORMER CONFORMED NAME: CREATIVE RECYCLING TECHNOLOGIES INC DATE OF NAME CHANGE: 19980505 FORMER COMPANY: FORMER CONFORMED NAME: CLASSIC RESTAURANTS INTERNATIONAL INC /CO/ DATE OF NAME CHANGE: 19960619 FORMER COMPANY: FORMER CONFORMED NAME: CLASSIC RESTAURANTS INC/CO DATE OF NAME CHANGE: 19960604 10QSB 1 ingen_10qsb-113004.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE QUARTERLY PERIOD ENDED November 30, 2004 Commission File Number ___________ INGEN TECHNOLOGIES, INC. ------------------------ (Exact name of registrant as specified in its charter) Georgia 88-0429044 ------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 35193 Avenue "A", Suite-C, Yucaipa, California 92399 ---------------------------------------------- ----- (Address of principal executive offices) (Zip Code) (800) 259-9622 -------------- (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, no par value -------------------------- (Title of Class) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [x] At November 30, 2004, 81,732,593 shares of the registrant's common stock (no par value) were outstanding. Transitional Small Business Disclosure Format (check one): YES / / NO /X/ PART I. - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET (UNAUDITED) - ------------------------------------------------------------------------------------------------ November 30, 2004 2003 - ------------------------------------------------------------------------------------------------ ASSETS Current assets Cash $ 716 $ -- ----------- ----------- Total current assets 716 -- ----------- ----------- Property and equipment, net of accumulated depreciation of $68,030 for 2004 and $0 for 2003 29,807 -- Other Assets Patents, net of accumulated amortization of $9,964 for 2004 and $0 for 2003 16,941 ----------- ----------- Total other assets 16,941 -- ----------- ----------- TOTAL ASSETS $ 47,464 $ -- =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable $ 20,000 $ 35,000 Accrued Expenses 480,677 -- Litigation reserve 143,500 -- ----------- ----------- Total current liabilities 644,177 35,000 ----------- ----------- Long-term Liabilities Officer's loan 241,958 -- Notes payable 25,000 -- ----------- ----------- Total long-term liabilities 266,958 -- ----------- ----------- Stockholders' Deficit Preferred stock, no par value, 40,000,000 and no authorized, issued and outstanding no for both years -- -- Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 12,864,593 and 3,221,524 5,442,153 5,758,406 Accumulated deficit (6,305,824) (5,793,406) ----------- ----------- Total stockholders deficit (863,671) (35,000) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 47,464 $ -- =========== =========== 1 CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - ------------------------------------------------------------------------------------------------------------ For three months ended For six months ended November 30, November 30, ----------------------------------------------------------- 2004 2003 2004 2003 - ------------------------------------------------------------------------------------------------------------ Revenues $ 86,813 $ -- $ 223,293 $ -- Cost of Revenues 37,091 -- 95,247 -- ----------------------------------------------------------- Gross Profit 49,722 -- 128,046 -- Selling, General and Administrative Expenses 72,871 -- 168,215 -- ----------------------------------------------------------- Operating Income (Loss) (23,149) -- (40,169) -- ----------------------------------------------------------- Other Income (Expenses): Interest and Other Income Interest Expense (3,629) -- (6,719) -- ----------------------------------------------------------- Total Other Income (Expenses) (3,629) -- (6,719) -- Net Income (Loss) before Income Taxes (26,778) -- (46,888) -- Provision for Taxes -- -- 800 ----------------------------------------------------------- Net Income (Loss) $ (26,778) $ -- $ (47,688) $ -- =========================================================== Net Income (Loss) per share, Basic and Diluted NIL $ -- NIL $ -- Weighted Average Number of Shares 12,864,593 3,221,524 12,864,593 3,221,524 2 CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - ------------------------------------------------------------------------------------------ For the six months ended November 30, 2004 2003 - ------------------------------------------------------------------------------------------ Cash Flow from Operating Activities: Net loss $(47,688) $ -- Adjustments to reconcile net loss to net cash used in operations: Stock Issued for Services Depreciation and amortization 5,617 -- Increase (Decrease) in: Accounts payable & Accrued expenses 7,517 -- -------- -------- Net Cash Used in Operating Activities (34,554) -- -------- -------- Cash Flow from Investing Activities: -------- -------- Net Cash Used In Investing Activities -- -- -------- -------- Cash Flow from Financing Activities: Net repayments from note payable to related party (34,223) -- Proceeds from issuance of common stock 34,940 -- -------- -------- Net Cash Flow Provided by Financing Activities 717 -- -------- -------- Net Increase (Decrease) Increase in Cash (33,837) -- Cash Balance at Beginning of Period 34,553 -- -------- -------- Cash Balance at End of Period $ 716 $ -- ======== ======== Supplemental Disclosures of Cash Flow Information Interest paid $ -- $ -- Taxes paid $ -- $ -- 3
NOTE 1 - NATURE OF BUSINESS Ingen Technologies, Inc., (formerly known as Creative Recycling Technologies Inc., the "Company" or "Ingen Technologies"), is a Public Company trading under OTC: IGTN.PK. Ingen Technologies is a growth-oriented technology company that offers a diverse and progressive services and products. Ingen Technologies, Inc., is a Georgia corporation ("IGTN") and owns 100% of the capital stock of Ingen Technologies, Inc. a Nevada corporation and it has been in business since 1999. The Company's flagship product is its BAFI (TM), the world's first wireless digital low gas warning system for pressurized gas cylinders. On October 24, 2000, the BAFI (TM) received a U.S. Patent with Patent No. 6,137,417. BAFI (TM), now in its second generation, is an accurate and cost-effective, real-time pressurized gas warning system that will alert users when gas levels are approaching empty. The BAFI (TM) line has multiple applications, inclusive but not limited to, the Medical Industry, Home Consumer, Residential Development Industry, Safety & Protection (fire and police), Aircraft Industry, and the Recreational Vehicle Industry. BAFI (TM) meets or exceeds regulatory compliance of this type of product and is completed and in production. The Secure Balance (TM) product is a private-label product that includes a vestibular function testing system and balance therapy system available to physicians throughout the United States. Presentation of Interim Information: The accompanying consolidated financial statements as of November 30, 2004 and 2003, for the three and six months ended November 30, 2004 and 2003 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended May 31, 2004. In the opinion of Management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of November 30, 2004 and 2003, for the three and six months ended November 30, 2004 and 2003 have been made. The results of operations for the six months ended November 30, 2004 are not necessarily indicative of the operating results for the full year. Principle of Consolidation and Presentation: The accompanying consolidated financial statements include the accounts of Ingen Technologies, Inc. and its subsidiaries after elimination of all inter-company accounts and transactions. Certain prior period balances have been reclassified to conform to the current period presentation. NOTE 2 - GOING CONCERN The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. In the near term, the Company expects operating costs to continue to exceed funds generated from operations. As a result, the Company expects to continue to incur operating losses and may not have sufficient funds to grow its business in the near future. The Company can give no assurance that it will achieve profitability or be capable of sustaining profitable operations. As a result, operations in the near future are expected to continue to use working capital. Management of the Company is actively increasing marketing efforts to increase revenues. The ability of the Company to continue as a going concern is dependent its ability to meet its financing arrangement and the success of its future operations. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The company incurred a loss of $47,688 and $0 for the six months ended November 30, 2004 and 2003, and as of that date, had an accumulated deficit of $6,305,824 and $5,793,406, respectively. 4 NOTE 3 - ACCRUED EXPENSES Accrued expenses at November 30, 2004 consist of: 2004 ----------- Accrued officer's compensation $ 460,000 Accrued Interest Expense 19,077 Accrued taxes 1,600 ----------- Total $ 480,677 =========== NOTE 4 - NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share: November 30, 2003 ------------------------------ Numerator: Net Loss $ (47,688) $ -- ------------ ------------ Denominator: Weighted Average Number of Shares 12,864,593 3,221,524 ------------ ------------ Net loss per share-Basic and Diluted NIL $ 0.00 NOTE 5 - SEGMENT INFORMATION SFAS No. 131 "Disclosures about Segments of an Enterprise and Related Information" requires that a publicly traded company must disclose information about its operating segments when it presents a complete set of financial statements. Since the Company has only one segment; accordingly, detailed information of the reportable segment is not presented. NOTE 6 - RELATED PARTY TRANSACTIONS The Company had notes payable to a related party in the amounts of $241,958 and $0 as of November 30, 2004 and 2003, respectively. The interest rate on the loan is 6% and due upon working capital availability, but no sooner than June 1, 2006. The related accrued interest is $19,077 and $0 as of November 30, 2004 and 2003, respectively. As of November 30, 2004 there was a note payable to a related party for the amount of $25,000 with zero interest. NOTE 7 - LITIGATION SETTELMENT As of November 30, 2004, there was a pending litigation in connection with the previous landlord for breaking a facility lease by the Company. The management had estimated and accrued a loss for $143,500. NOTE 8 - GUARANTEES The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company August provide customary indemnifications to purchasers of the Company's businesses or assets; and (ii) certain agreements with the Company's officers, directors and employees, under which the Company August be required to indemnify such persons for liabilities arising our of their employment relationship. The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on its balance sheet as of November 30, 2004. 5 NOTE 9 - PREFERRED STOCK As of November 30, 2004, the Company was authorized to issue 40,000,000 shares of no par value preferred stock. As of November 30, 2004, the Company had zero shares of preferred stock issued and outstanding. No dividends shall accrue or be payable on the preferred stocks. As of November 30, 2003, no preferred stock was issued. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS This Quarterly Report on Form 10-QSB contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect management's current views with respect to future events and financial performance. In this report, the words "anticipates," "believes," "expects," "intends," "future," "may" and similar expressions identify forward-looking statements. These and other forward-looking statements are subject to certain risks and uncertainties, including those discussed in the Risk Factors section of this Item 2 and elsewhere in this Form 10-QSB, that could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances occurring subsequent to the filing of the Form 10-QSB with the Securities and Exchange Commission. OVERVIEW We are a medical device manufacturer and service provider for medical and consumer markets both domestic and (planned for) abroad. We have four products, one of which has had sales in this fiscal quarter (Secure Balance(TM)). The others are oxygen and gas monitoring safety devices that are developing; OxyView, OxyAlert(TM) and GasAlert(TM). We were not operational in fiscal year 2003 and were known then as Creative Recycling Technologies, Inc. We resumed operations when we merged with, and took the name of, Ingen Technologies, Inc. in March of 2004. Our sales revenues for the second quarter of fiscal year 2005 (September 1, 2004 through November 30, 2004) were $86,813, compared with no sales in the first quarter of fiscal year 2004. We had sales of $223,293 in the first 2 quarters of fiscal year 2005 (June 1, 2004 to November 30, 2004) All of these sales were of Secure Balance(TM). We expect sales to grow for our current fiscal year and beyond as we build our Secure Balance(TM) brand recognition in the market and intensify our efforts for market penetration. We have had significant losses since inception. Our net loss was $26,778 in the second quarter of fiscal year 2005, compared with no loss in the first quarter of fiscal year 2004. Our net loss for the first two quarters of fiscal year 2005 was $47,688. We anticipate that we will incur substantial additional operating losses in our fiscal year 2005 as we continue our research and development of our BAFI(TM) product line and continue to seek an increase in Secure Balance(TM) sales. As of November 30, 2004, we had an accumulated deficit of $6,305,824 (up from $5,793,406 in the second quarter of fiscal year 2003). Our business plan for the remainder of fiscal year 2005 (ending May 31, 2005) is to continue our efforts to increase the market share Secure Balance(TM) and to continue research and development of our BAFI(TM) product line. We sold $34,940 worth of our restricted common stock during this fiscal quarter. CRITICAL ACCOUNTING POLICIES Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements. Certain of our policies require the application of management judgment in making estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes. Those estimates and assumptions are based on historical experience and various other factors deemed to be applicable and reasonable under the circumstances. The use of judgment in determining such estimates and assumptions is by nature, subject to a degree of uncertainty. Accordingly, actual results could differ from the estimates made. Our significant accounting policies include: 7 STOCK-BASED COMPENSATION SFAS No. 123, "Accounting for Stock-Based Compensation," establishes the use of the fair value based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. The statement also permits companies to elect to continue using the intrinsic value accounting method specified in Accounting Principles Bulletin Opinion No. 25, "Accounting for Stock Issued to Employees," to account for stock-based compensation issued to employees. Through November 30, 2004, we have elected to use the intrinsic value based method and have disclosed the pro forma effect of using the fair value based method to account for our stock-based compensation. We plan to continue using the intrinsic value based method and providing disclosure for the pro forma effect of using the fair value based method to account for our stock-based compensation through our fiscal quarter ending in November, 2005. As a result of the recent adoption by the Financial Accounting Standards Board of SFAS No. 123 (revised 2004) "Share-Based Payment," or SFAS No. 123(R), we will be required, beginning in our fiscal quarter ending February of 2006, to apply the fair value method as prescribed in SFAS No. 123(R). Although our adoption of SFAS No. 123(R) could have a material impact on our financial position and results of operations, we are still evaluating the potential impact from adopting this statement. ALLOCATION OF COSTS We allocate certain indirect costs associated with support activities such as the rent and utilities for facilities. These costs are allocated between research and development expense and general and administrative expense based on headcount and/or square footage. OFF-BALANCE SHEET ARRANGEMENTS We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs). RESULTS OF OPERATIONS We had $86,813 in sales in the second quarter of fiscal year 2005, up from no sales (as mentioned above, we weren't operating) in the same quarter of fiscal year 2004. We had $223,293 in sales for the first 6 months of fiscal year 2005. Our cost of sales was $37,091 in the second quarter of fiscal year 2005 and $95,247 for the first 6 months of the fiscal year. As a result, our gross profit was $49,722 for the second quarter and $128,046 for the fiscal year to date. Our operating loss was $26,778 in the second quarter of the fiscal year and $47,688 for the first two quarters of the fiscal year. We expect our operating costs to increase in fiscal year 2005, but still have a goal of turning a profit late in fiscal year 2006 or in 2007. We have not generated profits to date and therefore have not paid any federal income taxes since inception. We paid $800 minimum franchise tax in California in 2004 and 2005. As of May 31, 2004, our federal tax net operating loss carryforward was $1,009,516, which will begin to expire in 2019, if not utilized. Our ability to utilize our net operating loss and tax credit carryforwards may become subject to limitation in the event of a change in ownership. LIQUIDITY AND CAPITAL RESOURCES We financed our operations in the second quarter of fiscal year 2005 through $86,813 of sales of Secure Balance(TM) and private placement common stock sales totaling $34,940. In years past, prior to the commencement of Secure Balance(TM) sales, we relied on loans and deferments from our CEO and Chairman Scott R. Sand and the approximate $300,000 investment of Mr. Jeffrey Gleckman (one of our two preferred shareholders). From June 10, 1999 to March 31, 2004, Mr. Sand provided "Ingen Nevada," and then "Ingen Georgia" (after our reverse merger; for a short period of time) with a total of $72,000 in cash loans and $360,000 in deferred executive compensation. Mr. Sand drew $54,000 in compensation over this time period. We repaid Mr. Sand $60,000 in the first quarter of fiscal year 2006, $173,379 in fiscal year 2005 and $33,649 in 2004. 8 As of November 30, 2004, we had cash on hand of $716 (compared to no cash in the same quarter of fiscal year 2004). Our future cash requirements will depend on many factors, including finishing our research and development programs for our BAFI(TM) product line, the costs involved in filing, prosecuting and enforcing patents, competing technological and market developments and the cost of product commercialization, as well as our ongoing Secure Balance(TM) sales effort. We do not expect to generate a positive cash flow from operations at least until the commercial launch of our BAFI(TM) product line (planned for calendar year 2006) and possibly later given the expected cost of commercializing our products. We intend to seek additional funding through public or private financing transactions. Successful future operations are subject to a number of technical and business risks, including our continued ability to obtain future funding, satisfactory product development and market acceptance for our products. See "Business Risks" below. PLAN OF OPERATION (FOR BAFI(TM) PRODUCT LINE) We will continue to finance our BAFI(TM) product line research and development through Secure Balance sales receipts. We will also attempt to sell some of our stock later this fiscal year in private placement transactions to secure more working capital. TRENDS THAT MAY IMPACT OUR LIQUIDITY Positive Trends: The United States has an increasingly elderly population. Our Secure Balance(TM) and BAFI(TM) product line (except GasAlert(TM) which targets the entire adult population) are made to meet some of the challenges and circumstances experienced by our senior citizens. As a result, we expect our sales to increase in time in reflection of this positive trend. Management also believes that our products provide increasing protection in relation to medical malpractice issues. Use of our Secure Balance(TM) system and OxyAlert(TM) and OxyView products enhance the safety of patients, and therefore, we believe, lessen the chances of medical malpractice exposure to our physician clients. We have been developing our BAFI(TM) product line since 1999. Now, some 5 years later, we still have not identified competition in the marketplace for our BAFI(TM) product line. The lack of competition is expected to enhance our planned marketing campaign. We believe that Secure Balance(TM) is now among the leaders in the balance and fall prevention industry. We expect to be able to capitalize on this notoriety and increase our Secure Balance(TM) sales in fiscal year 2005 and beyond. Negative Trends: Our product sales are impacted by Medicare, and are Medicare dependent. Adverse economic conditions, federal budgetary concerns and politics can affect Medicare regulations and could negatively impact our product sales. SEASONAL ASPECTS THAT EFFECT MAY IMPACT OUR MEDICAL MARKET Traditionally, the medical market experiences an economic decrease in purchasing during the summer months. Peak months are usually October through February, followed by a decrease from March to May. This is the common "bell curve" that has been consistent for several decades and will affect our sales during the course of a year. NEW EMPLOYEES We do not anticipate hiring employees over the next twelve months. 9 BUSINESS RISKS The following is a summary of the many risks and uncertainties we face in our business. You should carefully read these risks and uncertainties as well as the other information in this report in evaluating our business and its prospects. WE HAVE A HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT, AND WE MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE. We have experienced significant operating losses in each period since our inception. As of November 30, 2004, we have incurred total accumulated losses of $6,305,824. We expect these losses to continue and it is uncertain when, if ever, we will become profitable. These losses have resulted principally from costs incurred in research and development and from general and administrative costs associated with operations. We expect to incur operating losses in the future as a result of expenses associated with research and product development as well as general and administrative costs. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. WE WILL NEED ADDITIONAL CAPITAL IN THE FUTURE TO SUPPORT OUR GROWTH, AND RAISING SUCH CAPITAL WILL LIKELY CAUSE SUBSTANTIAL DILUTION TO EXISTING STOCKHOLDERS. IF ADDITIONAL CAPITAL IS NOT AVAILABLE, WE MAY HAVE TO CURTAIL OR CEASE OPERATIONS. Our current plans indicate we will need significant additional capital for research and development and market penetration before we have any anticipated revenue generated from our BAFI(TM) product line. The actual amount of funds that we will need will be determined by many factors, some of which are beyond our control, and we may need funds sooner than currently anticipated. These factors include: o the extent to which we enter into licensing arrangements, collaborations or joint ventures; o our progress with research and development; o the costs and timing of obtaining new patent rights (if any); o cost of continuing operations and sales; o the extent to which we acquire or license other technologies; and o regulatory changes and competition and technological developments in the market. We will be relying on future securities sales to enable us to grow and reach profitability. There is no guarantee we will be able to sell our securities. WE HAVE RELIED ON CAPITAL CONTRIBUTED BY RELATED PARTIES, AND SUCH CAPITAL MAY NOT BE AVAILABLE IN THE FUTURE. We have relied on loans and compensation deferrals from our CEO and Chairman, Scott R. Sand, and investment from Jeffrey Gleckman, to sustain us from 1999 into fiscal year 2004. Although we have paid some of these loans from Mr. Sand back, we may be unable to repay the remainder ($241,958) and may have to look again to Mr. Sand for assistance in financing if our securities sales don't go as planned. There is no guarantee that Mr. Sand will have financial resources available to assist in our funding. WE ARE SUBJECT TO NEW CORPORATE GOVERNANCE AND INTERNAL CONTROLS REPORTING REQUIREMENTS, AND OUR COSTS RELATED TO COMPLIANCE WITH, OR OUR FAILURE TO COMPLY WITH EXISTING AND FUTURE REQUIREMENTS COULD ADVERSELY AFFECT OUR BUSINESS. We face new corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as new rules and regulations subsequently adopted by the SEC. These laws, rules and regulations continue to evolve and may become increasingly stringent in the future. In particular, we will be required to include management and auditor reports on internal controls as part of our annual report for the year ended December 31, 2006 pursuant to Section 404 of the Sarbanes-Oxley Act. We cannot assure you that we will be able to fully comply with these laws, rules and regulations that address corporate governance, internal control reporting and similar matters. Failure to comply with these laws, rules and regulations could materially adversely affect our reputation, financial condition and the value of our securities. 10 OUR PRODUCTS MAY NOT BE SUCCESSFULLY DEVELOPED OR COMMERCIALIZED, WHICH WOULD HARM US AND FORCE US TO CURTAIL OR CEASE OPERATIONS. We are a relatively new company and our BAFI(TM) product line in particular is still in the late stages of development (we still need manufacturing prototypes). These products, once marketing commences, may not be successfully developed or commercialized on a timely basis, or at all. If we are unable, for technological or other reasons, to complete the development, introduction or scale-up of manufacturing of these products or other potential products, or if our products do not achieve a significant level of market acceptance, we would be forced to curtail or cease operations. Even if we develop our products for commercial use, we may not be able to develop products that: o are accepted by, and marketed successfully to, the medical marketplace; o are safe and effective; o are protected from competition by others; o do not infringe the intellectual property rights of others; o are developed prior to the successful marketing of similar products by competitors; or o can be manufactured in sufficient quantities or at a reasonable cost. WE MAY NOT BE ABLE TO FORM AND MAINTAIN THE COLLABORATIVE RELATIONSHIPS THAT OUR BUSINESS STRATEGY REQUIRES, AND IF WE CANNOT DO SO, OUR ABILITY TO DEVELOP PRODUCTS AND REVENUE WILL SUFFER. We must form research collaborations and licensing arrangements with several partners at the same time to operate our business successfully. To succeed, we will have to maintain our existing relationships and establish additional collaborations. We cannot be sure that we will be able to establish any additional research collaborations or licensing arrangements necessary to develop and commercialize products using our technology or that we can do so on terms favorable to us. If our collaborations are not successful or we are not able to manage multiple collaborations successfully, our programs may suffer. Collaborative agreements generally pose the following risks: o collaborators may not pursue further development and commercialization of products resulting from collaborations or may elect not to continue or renew research and development programs; o collaborators may delay clinical trials, under-fund a clinical trial program, stop a clinical trial or abandon a product, repeat or conduct new clinical trials or require a new formulation of a product for clinical testing; o collaborators could independently develop, or develop with third parties, products that could compete with our future products; o the terms of our agreements with our current or future collaborators may not be favorable to us; o a collaborator with marketing and distribution rights to one or more products may not commit enough resources to the marketing and distribution of our products, limiting our potential revenues from the commercialization of a product; o disputes may arise delaying or terminating the research, development or commercialization of our products, or result in significant litigation or arbitration; and o collaborations may be terminated and, if terminated, we would experience increased capital requirements if we elected to pursue further development of the product. 11 SECURE BALANCE(TM) IS A PRIVATE LABEL PRODUCT THAT IS NOT EXCLUSIVE TO US. We provide education, training and services related to the SportKat product lines that all constitute what we call "Secure Balance(TM)." However, the devices themselves are provided to us on a non-exclusive basis, meaning that other companies are marketing the same devices under other names (or using the SportKat name). Only time will tell if the non-exclusive nature of the provision of the devices themselves to us negatively impacts our ability to capture a meaningful market share. If our sales of Secure Balance(TM) suffer because of this non-exclusive relationship, our financial prospects and operational results will be negatively impacted. ALTHOUGH WE DO NOT HAVE DIRECT COMPETITION IN RELATION TO OUR BAFI(TM) PRODUCT LINE, WE EXPECT IT IN THE FUTURE. Although we are unaware of any current competition for our BAFI(TM) product line, we expect competition to develop after we begin marketing our products. It is unknown at this time what impact any such competition could have on us. However, we are a "going concern" enterprise and it is certainly foreseeable that more than one competitor could emerge that is much stronger financially than we are and/or could already have significant marketing relationships for other medical devices. WE DO NOT HAVE INTERNATIONAL PATENTS. Although we have stated that we intend to apply for international patents for our BAFI(TM) product line, we have not as yet done so. We do not know when, and if, we will apply for such patents. If we do not apply for these patents, or if there are delays in obtaining the patents, or if we are unable to obtain the patents, we may not be able to adequately protect our technologies in foreign markets. IF WE ARE UNABLE TO PROTECT EFFECTIVELY OUR INTELLECTUAL PROPERTY, THIRD PARTIES MAY USE OUR TECHNOLOGY, WHICH COULD IMPAIR OUR ABILITY TO COMPETE IN OUR MARKETS. Our success will depend on our ability to obtain and protect patents on our technology and to protect our trade secrets. The patents we currently own, may not afford meaningful protection for our technology and products. Others may challenge our patents and, as a result, our patents could be narrowed, invalidated or unenforceable. In addition, our current and future patent applications may not result in the issuance of patents in the United States or foreign countries. Competitors might develop products similar to ours that do not infringe on our patents. In order to protect or enforce our patent rights, we may initiate interference proceedings, oppositions, or patent litigation against third parties, such as infringement suits. These lawsuits could be expensive, take significant time and divert management's attention from other business concerns. The patent position of medical firms generally is highly uncertain, involves complex legal and factual questions, and has recently been the subject of much litigation. No consistent policy has emerged from the U.S. Patent and Trademark Office or the courts regarding the breadth of claims allowed or the degree of protection afforded under biotechnology patents. In addition, there is a substantial backlog of applications at the U.S. Patent and Trademark Office, and the approval or rejection of patent applications may take several years. We cannot guarantee that our management and others associated with us will not improperly use our patents, trademarks and trade secrets. Further, others may gain access to our trade secrets or independently develop substantially equivalent proprietary information and techniques. OUR SUCCESS WILL DEPEND PARTLY ON OUR ABILITY TO OPERATE WITHOUT INFRINGING ON OR MISAPPROPRIATING THE PROPRIETARY RIGHTS OF OTHERS. We may be sued for infringing on the patent rights or misappropriating the proprietary rights of others. Intellectual property litigation is costly, and, even if we prevail, the cost of such litigation could adversely affect our business, financial condition and results of operations. In addition, litigation is time consuming and could divert management attention and resources away from our business. If we do not prevail in any litigation, we could be required to stop the infringing activity and/or pay substantial damages. Under some circumstances in the United States, these damages could be triple the actual damages the patent holder incurs. If we have supplied infringing products to third parties for marketing or licensed third parties to manufacture, use or market infringing products, we may be obligated to indemnify these third parties for any damages they may be required to pay to the patent holder and for any losses the third parties may sustain themselves as the result of lost sales or damages paid to the patent holder. 12 If a third party holding rights under a patent successfully asserts an infringement claim with respect to any of our products, we may be prevented from manufacturing or marketing our infringing product in the country or countries covered by the patent we infringe, unless we can obtain a license from the patent holder. Any required license may not be available to us on acceptable terms, or at all. Some licenses may be non-exclusive, and therefore, our competitors may have access to the same technology licensed to us. If we fail to obtain a required license or are unable to design around a patent, we may be unable to market some of our anticipated products, which could have a material adverse effect on our business, financial condition and results of operations. IF WE LOSE OUR KEY MANAGEMENT PERSONNEL, OUR PRODUCT DEVELOPMENT AND COMMERCIALIZATION EFFORTS WOULD SUFFER. Our performance is substantially dependent on the performance of our current senior management, Board of Directors and key scientific and technical personnel and advisers. The loss of the services of any member of our senior management, in particular Mr. Scott Sand, our CEO and Chairman, Board of Directors, scientific or technical staff or advisory board may significantly delay or prevent the achievement of product development and other business objectives and could have a material adverse effect on our business, operating results and financial condition. WE HAVE NO COMMERCIAL PRODUCTION CAPABILITY YET FOR OUR BAFI(TM) PRODUCT LINE AND WE MAY ENCOUNTER PRODUCTION PROBLEMS OR DELAYS, WHICH COULD RESULT IN LOWER REVENUE. To date, we have not produced a BAFI(TM) product line product for sale. Customers for any potential products and regulatory agencies will require that we comply with current good manufacturing practices that we may not be able to meet. We may not be able to maintain acceptable quality standards if we ramp up production. To achieve anticipated customer demand levels, we will need to scale-up our production capability and maintain adequate levels of inventory. We may not be able to produce sufficient quantities to meet market demand. If we cannot achieve the required level and quality of production, we may need to outsource production or rely on licensing and other arrangements with third parties. This reliance could reduce our gross margins and expose us to the risks inherent in relying on others. We may not be able to successfully outsource our production or enter into licensing or other arrangements under acceptable terms with these third parties, which could adversely affect our business. WE HAVE NO MARKETING OR SALES STAFF, AND IF WE ARE UNABLE TO ENTER INTO COLLABORATIONS WITH MARKETING PARTNERS OR IF WE ARE UNABLE TO DEVELOP OUR OWN SALES AND MARKETING CAPABILITY, WE MAY NOT BE SUCCESSFUL IN COMMERCIALIZING OUR PRODUCTS. We currently have no in-house sales, marketing or distribution capability for our BAFI(TM) product line. As a result, we will depend on collaborations with third parties that have established distribution systems and direct sales forces. To the extent that we enter into co-promotion or other licensing arrangements, our revenues will depend upon the efforts of third parties, over which we may have little or no control. If we are unable to reach and maintain agreement with one or more distribution entities or collaborators under acceptable terms, we may be required to market our products directly (direct marketing is one component of our marketing strategy). We may elect to establish our own specialized sales force and marketing organization to market our products. In order to do this, we would have to develop a marketing and sales force with technical expertise and with supporting distribution capability. Developing a marketing and sales force is expensive and time consuming and could delay a product launch. We may not be able to develop this capacity, which would make us unable to commercialize our products. IF WE ARE SUBJECT TO PRODUCT LIABILITY CLAIMS AND HAVE NOT OBTAINED ADEQUATE INSURANCE TO PROTECT AGAINST THESE CLAIMS, OUR FINANCIAL CONDITION WOULD SUFFER. If we are able to launch commercially our BAFI(TM) product line, we will face exposure to product liability claims. We have exposure selling Secure Balance(TM). We have limited product liability insurance coverage, but there is no guarantee that it is adequate coverage. There is also a risk that third parties for which we have agreed to indemnify could incur liability. We cannot predict all of the possible harms or side effects that may result and, therefore, the amount of insurance coverage we obtain may not be adequate to protect us from all liabilities. We may not have sufficient resources to pay for any liabilities resulting from a claim beyond the limit of, or excluded from, our insurance coverage. 13 OUR STOCK IS THINLY TRADED, WHICH CAN LEAD TO PRICE VOLATILITY AND DIFFICULTY LIQUIDATING YOUR INVESTMENT. The trading volume of our stock has been low, which can cause the trading price of our stock to change substantially in response to relatively small orders. In addition, from June of 2003 through November 30, 2004, our common stock has traded as low as .002 and as high as .285 per share. Both volume and price could also be subject to wide fluctuations in response to various factors, many of which are beyond our control, including: o actual or anticipated variations in quarterly and annual operating results; o announcements of technological innovations by us or our competitors; o developments or disputes concerning patent or proprietary rights; and o general market perception of medical device and provider companies. IF THE OWNERSHIP OF OUR COMMON STOCK CONTINUES TO BE SOMEWHAT CONCENTRATED, IT MAY PREVENT YOU AND OTHER STOCKHOLDERS FROM INFLUENCING SIGNIFICANT CORPORATE DECISIONS AND MAY RESULT IN CONFLICTS OF INTEREST THAT COULD CAUSE OUR STOCK PRICE TO DECLINE. As of November 30, 2004, our executive officers, directors and their affiliates beneficially own or control approximately 20% of the outstanding shares of our common stock. Accordingly, our current executive officers, directors and their affiliates will have some control over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transactions. These stockholders may also delay or prevent a change of control of us, even if such a change of control would benefit our other stockholders. The concentration of stock ownership may adversely affect the trading price of our common stock due to investors' perception that conflicts of interest may exist or arise. WE MAY ISSUE PREFERRED STOCK IN THE FUTURE, AND THE TERMS OF THE PREFERRED STOCK MAY REDUCE THE VALUE OF YOUR COMMON STOCK. We are authorized to issue up to 40,000,000 shares of preferred stock in one or more series. Our Board of Directors will be able to determine the terms of preferred stock without further action by our stockholders. If we issue preferred stock, it could affect your rights or reduce the value of your common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with or sell our assets to a third party. These terms may include voting rights, preferences as to dividends and liquidation, conversion and redemption rights, and sinking fund provisions. WE HAVE NOT, AND CURRENTLY DO NOT ANTICIPATE, PAYING DIVIDENDS ON OUR COMMON STOCK. We have never paid any dividends on our common stock and do not plan to pay dividends on our common stock for the foreseeable future. We currently intend to retain future earnings, if any, to finance operations, capital expenditures and the expansion of our business. ITEM 3. CONTROLS AND PROCEDURES We maintain disclosure controls and procedures designed to ensure that material information related to our company is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. (a) As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our CEO and CFO concluded, as of the date of such evaluation, that the design and operation of such disclosure controls and procedures were effective. 14 (b) No significant changes were made in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter. (c) Limitations. Our management, including our CEO and CFO, does not expect that our disclosure controls or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected. PART II. - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We may from time to time become a party to legal proceedings arising in the ordinary course of business. Other than the lawsuit described above, we are not currently a party to any material pending litigation or other material legal proceeding. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES We sold $34,940 worth of our unrestricted common shares in a Regulation S of the SEC (foreign private placement sales) private offering in the second quarter of fiscal year 2005. These shares were sold through our agreement with one of our Directors, Khoo Yong Sin, dated October 15, 2004 (exhibit 10.25 to our Form 10-KSB for the fiscal year ending May 31, 2005). There weren't enough shares sold to present a change in control issue. ITEM 6. EXHIBITS - note; Ingen Technologies, Inc. has already filed a Form 10-KSB for our fiscal year 2005. The date of the filing was November 7, 2005. This Form 10-QSB is for one of the quarters in our fiscal year 2005. All applicable exhibits for this quarter of fiscal year 2005 are contained within our 10-KSB filed on November 7, 2005, and are incorporated herein by this reference. Exhibit No. Document Description - ----------- -------------------- 10.1 Agreement for the provision of legal services between Creative Recycling Technologies, Inc./Ingen Technologies, Inc. and Weed & Co. LLP, dated August 6, 2004.* 10.2 Agreement between Ingen Technologies, Inc. and Khoo Yong Sin dated October 15, 2004, for the purchase and sale of Ingen common shares. This agreement is exhibit 10.25 to our Form 10-KSB for our fiscal year 2005, ending May 31, 2005; and is incorporated herein as an exhibit. 31.1 Certification of Chief Executive Officer as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification of Chief Financial Officer as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32 Certification of Chief Executive Officer and Chief Financial Officer as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* - ----------- * Filed herewith. 15 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INGEN TECHNOLOGIES, INC. January 27, 2006 /s/ Scott R. Sand ------------------------------------- Scott R. Sand Chief Executive Officer and Chairman January 27, 2006 /s/ Thomas J. Neavitt ------------------------------------- Thomas J. Neavitt Secretary and Chief Financial Officer 16 EX-10.1 2 ingen_ex1001.txt Exhibit 10.1 August 6, 2004 Mr. Scott R. Sand, C.E.O & Chairman Creative Recycling Technologies, Inc. Ingen Technologies, Inc. 285 E. County Line Road Calimesa, CA 92320 Tel. 800-259-9622 Tel. 909-675-3266 Fax 800-777-1186 RE: CRTZ.PK Dear Mr. Sand: The purpose of this letter is to memorialize a fee agreement for legal services. This fee agreement is between Creative Recycling Technologies, Inc., a Georgia corporation, ("CRTZ") (subject to administrative dissolution by the Georgia Secretary of State and counterparty to a Plan and Agreement of Merger with Ingen Technologies, Inc., a Nevada corporation dated March 29, 2004), and Weed & Co. LLP, a California limited liability partnership ("Weed LLP"). WEED LLP SHALL RENDER THE FOLLOWING LEGAL SERVICES DESCRIBED IN EXHIBIT A ATTACHED HERETO AND CRTZ MAY ENGAGE WEED LLP ON ANY NEW MATTERS REFERENCED IN EXHIBIT A IN EXCHANGE FOR PAYMENT OF FEES DETERMINED IN ACCORDANCE WITH THIS AGREEMENT. WEED LLP MAKES NO PROMISES OR GUARANTEES REGARDING THE OUTCOME OF MATTERS UPON WHICH WEED LLP IS ENGAGED TO REPRESENT CRTZ. To protect both of the parties and to comply with professional obligations, we have already discussed with each other and resolved any potential conflicts of interest with present or former clients. The services that Weed LLP will provide shall be in accordance with the following terms and conditions. We advise you to seek the advice of independent counsel before signing this agreement. PROFESSIONAL FEES Fees are based upon the reasonable value of Weed LLP's services as determined in accordance with the American Bar Association Model Code of Professional Responsibility and the California & Texas Rules of Professional Conduct. Fees are based on the rates charged by Weed LLP. Weed LLP's rate is $300 per hour. It is anticipated that CRTZ and Weed LLP will agree on a fixed fee for special projects from time to time. The fixed fee arrangements for special projects will be agreed to in writing. Weed LLP's fees will be paid in cash or as follows: INITIAL RETAINER To commence the relationship and to insure the availability of Weed LLP, CRTZ shall provide a cash retainer of $2,000 within 10 days of signing this agreement. TERMS FOR PAYMENT IN STOCK INSTEAD OF CASH. As a non-cash alternative form of payment for professional services, beginning August 10, 2004, CRTZ has proposed and Weed LLP has agreed that CRTZ place an initial block of 500,000 shares of CRTZ's stock in Richard O. Weed's name, as designee for Weed LLP. At least once a month, Weed LLP will send CRTZ a statement for fees and costs. Unless objection is made to the bill, sufficient stock, net of commission, shall then be liquidated forthwith at the prevailing market rate to satisfy such statement. In the course of Weed LLP's representation of CRTZ, if all the initial block of stock is liquidated, a new block of stock sufficient to cover projected fees, in an amount contemporaneously agreed to by the parties, will again be placed with Weed LLP, under the terms and conditions outlined above. At the conclusion of Weed LLP's representation of Client and the payment of all final fees and costs, any unused stock shall forthwith be returned to CRTZ. CRTZ has agreed to promptly register such blocks of stock pursuant to a registration statement filed at its own expense. CRTZ shall cause any subsidiary or parent corporation to adopt and be bound by this agreement and all its provisions. STOCK OPTION As an incentive for Weed LLP to represent CRTZ and to increase Weed LLP's proprietary interest in the success of CRTZ, thereby encouraging him to maintain the relationship with CRTZ, CRTZ hereby grants to Richard O. Weed, as designee for Weed LLP options to purchase shares of CRTZ common stock. As an initial option, CRTZ hereby grants Richard O. Weed the right to purchase 1,000,000 shares of CRTZ common stock at a price of ten cents ($.10) per share. Further, every six months following the date hereof that this agreement remains in effect, CRTZ shall grant to Richard O. Weed an option to purchase an additional 1,000,000 shares of CRTZ common stock at a price equal to 125% of the average closing bid price for the 10 days immediately prior to the date of the grant. All stock options are non-transferable and will expire unless exercised on or before December 31, 2008 or 5 years from the date of the grant, whichever is later. CRTZ has agreed to promptly register the shares of common stock underlying the stock options at its own expense. The options granted will not be subject to dilution (i.e. no adjustment to the number of shares or the exercise price) based upon any reverse split of the CRTZ's common stock. The stock options shall be exercisable in whole or in part with a promissory note of less than 45 days duration or upon common "cashless exercise" terms. There may be risks inherent in the issuance of securities to Richard O. Weed and/or Weed & Co. LLP as compensation for services in lieu of cash. Such risks may include that the securities may ultimately be worth more or less than the value of our services or that by the exercise of our options, we may be in a position earn more than our hourly rate or exert some degree of control over the company. Further, the issuance of securities as compensation may dilute the percentage of ownership of your existing shareholders in the company and change the value of their shares. Moreover, the GAPP accounting treatment is frequently different when a company issues securities in lieu of cash for services. This occurs when shares are issued in exchange for services and the price of the shares fluctuates during the service period. A declining share price may require the company to issue additional securities to us and cause the company's income statement to reflect higher expenses for professional services in subsequent accounting periods than cash payment for services. Similarly, an increase in the company's share price may cause the company's income statement to reflect lower expenses for professional services in subsequent accounting periods than cash payment for services. The decision about whether or not to exercise any stock options is subject to our control. In the past, although not required, this decision was made following consultation with the company's management. It is anticipated that we will continue to consult with management concerning the timing and amount of the exercise of any stock options. COSTS AND EXPENSES CRTZ understands that in the course of representation, it may be necessary for Weed LLP to incur certain costs or expenses. CRTZ will reimburse Weed LLP for certain costs or expenses actually incurred and reasonably necessary for completing the assigned matter, as long as the charges for costs and expenses are competitive with other sources of the same products or services and approved by CRTZ in advance. More particularly, CRTZ will reimburse Weed LLP in accordance with the following guidelines: 1. COMPUTER-RELATED EXPENSES - CRTZ will reimburse Weed LLP for computerized research and research services. However, any charges over $500 per month will require approval. CRTZ also encourages Weed LLP to utilize computer services that will enable Weed LLP to more efficiently manage the projects. 2. TRAVEL - CRTZ will reimburse Weed LLP for expenses in connection with out of town travel. However, CRTZ will only reimburse for economy class travel and, where necessary, for the reasonable cost of a rental car. All related travel expenses, i.e., lodging and meals, must be reasonable under the circumstances. 3. FILING FEES & COURT COSTS - CRTZ will reimburse Weed LLP for expenses incurred in connection with filing fees and court costs, if any, but will not be responsible for sanctions or penalties imposed due to the conduct of Weed LLP. CRTZ shall pay and hold Weed LLP harmless from all such costs and expenses incurred on CRTZ's behalf. Weed LLP may, but shall not be obligated to, advance funds on CRTZ's behalf. In such event, CRTZ agrees to reimburse Weed LLP upon demand for the amounts advanced. Substantial outside fees (such as state filing fees or SEC filing services) may be referred to CRTZ for direct payment. BILLING All bills will include a summary statement of the kinds of services rendered during the relevant period. CRTZ expects that Weed LLP will maintain back-up documentation for all expenses. CRTZ expects to be billed monthly or at the conclusion of each project and agrees to pay Weed LLP's invoices within fifteen days of receipt. Weed LLP shall bill in increments of one-quarter (1/4) hour unless otherwise agreed in writing. DELAY IN PAYMENT In the event that any of Weed LLP's bills remain unpaid for more than 30 days after receipt by CRTZ, Weed LLP shall have the right to discontinue rendering further services to CRTZ in connection with any matter then being handled for CRTZ by Weed LLP and to take appropriate action to collect such fees. INVOLVEMENT OF CRTZ CRTZ expects to be kept closely involved with the progress of Weed LLP's services in this matter. Weed LLP will keep CRTZ apprised of all material developments in this matter, and will provide sufficient notice to enable a representative to attend meetings, conferences, and other proceedings. There may be times when Weed LLP will need to obtain information from CRTZ. All requests for access to documents, employees, or other information shall be granted without unreasonable delay. TERMINATION CRTZ shall have the right to terminate Weed LLP's engagement by written notice at any time. Weed LLP has the same right to terminate this engagement, subject to an obligation to give CRTZ reasonable notice to permit it to obtain alternative representation or services and subject to applicable ethical provisions. Weed LLP will be expected to provide reasonable assistance in effecting a transfer of responsibilities to the new service provider. DISPUTES The laws of the State of California shall govern the interpretation of this agreement, including all rules or codes of ethics that apply to the provision of services. All disputes between us arising out of this engagement that cannot be settled shall be resolved in a federal or state court located in Orange County, California. If the foregoing accurately reflects our agreement regarding professional services, please sign and return a duplicate copy of this letter by facsimile. Thank you in advance for your prompt attention to this matter. Very truly yours, /s/ Richard O. Weed Richard O. Weed Managing Partner Approved and Agreed Creative Recycling Technologies, Inc. By: /s/ Scott R. Sand Name: Scott R. Sand Title: Chairman & CEO Date: August 20, 2004 EXHIBIT A Weed LLP shall advise CRTZ on general corporate matters. Further, Weed LLP shall assist, as necessary, with the CRTZ's efforts to become current with its reporting obligations under the Securities Exchange Act of 1934, including but not limited to all quarterly and annual reports for fiscal 2002, 2003 and 2004, current reports on Form 8-K and proxy statements. Weed will undertake to revive the corporate charter of CRTZ in the state of Georgia. Weed LLP shall assist with the design, implementation and restructuring of CRTZ as directed. Weed LLP and CRTZ understand and agree that it may be 6-12 months before Weed LLP is able to liquidate any of the shares being delivered by CRTZ under this fee agreement. CRTZ agrees that Weed LLP shall hold the shares in trust and that CRTZ's obligations for the payment of fees to Weed LLP shall not be fully discharged until Weed LLP has been able to either (1) convert the CRTZ shares to cash or (2) has applied the balance due and owing to Weed LLP for legal fees to the exercise price of the stock options granted to Richard O. Weed. To the extent the net cash proceeds from the disposition of the CRTZ shares exceed the then current balance due Weed LLP for legal fees, such cash shall be segregated in the Weed LLP Trust Account for the payment of future invoices or returned to CRTZ at the termination of the relationship. Moreover, the delivery of shares and grant of stock options in the foregoing fee agreement are based upon the following assumptions. There are approximately 84,000,000 shares of fully diluted CRTZ common stock issued and outstanding after giving effect to the Plan of Merger between CRTZ and Ingen Technologies, Inc. EX-31.1 3 ingen_ex3101.txt Exhibit 31.1 CERTIFICATION I, Scott R. Sand, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Ingen Technologies, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's Board of Directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: January 27, 2006 /s/ Scott R. Sand --------------------------------------------------- Scott R. Sand, Chief Executive Officer and Chairman EX-31.2 4 ingen_ex3102.txt Exhibit 31.2 CERTIFICATION I, Thomas J. Neavitt, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Ingen Technologies, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's Board of Directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: January 27, 2006 /s/ Thomas J. Neavitt ---------------------------------- Thomas J. Neavitt, Secretary and Chief Financial Officer EX-32 5 ingen_ex3200.txt Exhibit 32 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Ingen Technologies, Inc. (the "Company"), that, to his knowledge, the Quarterly Report of the Company on Form 10-QSB for the period ended November 30, 2004, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company as of the dates and for the periods presented in the financial statements included in such report. Dated: January 27, 2006 /S/ Scott R. Sand -------------------------------------- Scott R. Sand, Chief Executive Officer and Chairman Dated: January 27, 2006 /S/ Thomas J. Neavitt -------------------------------------- Thomas J. Neavitt, Secretary and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----